Wal-Mart plays a significant role in community development hence it anticipated that the business will benefit from the working families as well as other community members. The company has over the years gained tremendous growth in other markets apart from Arabic markets. Since UAE is a country with high economic growth and incentive for any business, Wal-Mart Inc intends to enter the eastern markets by establishing a branch company in UAE (Westwood).
The growing retail industry in United Arab Emirates is a strong fundamental for the introduction of the business. The main goal of the marketing plan is to introduce the new business to UAE at the minimal risk, while at the same time maintaining profitability. Dubai and Abu Dhabi will present many advantages for company. The economic growth of Dubai is a key essential for the business growth. Moreover, UAE as a country has few trade barriers, superior transportation networks, a well-defined legal system, positive retail conditions, strong economic growth, low political and transfer risks (Westwood).
The first objective for this marketing plan is creating company awareness and its products as well as product prices across United Arab Emirates. This objective is intended to create as well as stimulate interest among the target consumers. Additionally, it is meant to inform the consumers about the new company Wal-Mart UAE, its branch discount stores, shopping malls, warehouses as well as departmental stores across UAE and where the customers can find them. The company intends to create awareness of 100% within the market as well as target audience (Graham, John, Nigel & Nicoulaud).
The Wal-Mart UAE targets all residents of UAE, expatriates from Asia, tourists and visitors. UAE being a competitive environment for any kind of business, the company will develop into three market segments thus: the low-income individuals who prefer the well known brands; price sensitive affluents which mainly targets higher income people that prefer a good deal; and, finally, value-priced customers that have for whom low price products are the only option.
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Company Product Description
Wal-Mart Inc Store will offer a variety of products including electronics, movies, music, books, furniture, all type of baby, men and women wear, sports items, health care products, pharmaceutical products, jewelry, toys, photography, grocery and many more. The company distributes products through various department discount stores, warehouse store chains as well as shopping malls across UAE through where they will be displayed as well as sold to the consumers.
The company will establish a huge facility for online shopping as well as safe shipping. A reliable and warranted technological system will be established which will provide customers with all the purchasing options as well as any other type of goods both online and directly through mega stores. Privately labeled brands and brands such as Cott Beverages will be exclusively marketed at Wal-Mart outlets. Initiatives will be taken to maintain food items and their nutritional value through the use of more environmentally friendly technologies.
In Arabic society, many families like socializing hence going for shopping in malls is one of the ways for families tend to meet, socialize, and bond together. Therefore, families like going to shopping malls culturally as a way of getting entertainment for long periods of time. During the workday, many Arabic housewives usually go to the malls with friends to socialize as well as allow their children to play with each other at entertainment centers located on upper floors, while men are at work.
In addition, many men like going to the malls for fun with their friends to watch movies in cinemas located in the upper levels of the mall as well as to drink coffee at cafes, especially during late hours of the night (Krishna). On Friday and Saturday, large Arabic families usually pour into malls for various exciting events such as shopping, taking their kids to arcades, eating at restaurants, staying at mall hotels, walking and reclining among other events. Dubai being a tourist city, many individuals both resident and visitors believe that malls have high quality consumer goods hence most of them prefer shopping in malls than any other store.
Furthermore, Dubai’s society is young and enamored by the popular brands of products found in the malls so many retailers usually consider malls as the only place to relocate ther individual businesses. Putting up Wal-Mart Shopping Mall besides other prominent shopping malls in UAE will attract higher volumes of customers as well as the companies that will have enough retail space to carry out its operations (Krishna).
Advertising is usually an important promotional tool hence its always necessary that product advertisements should contain a message which actually focuses on key benefits of the product that are precise and important to the prospective buyers (Philip & Armstrong). Marketing promotional tools are used normally in various circumstances by different organizations to pull customers to buy a certain product (Philip & Armstrong).
This tool has been proved more efficient and effective, especially when launching a new product primarily to attract new and more potential customers. It is always important that an organization evaluates the funds available for marketing process as well as the expected return before selecting any marketing product promotional tool. Since Wal-Mart Inc Company is launching its branch company in UAE, creating awareness among various customers in relation to the new company’s products, prices, and goods will be necessary. To achieve this more effectively, Wal-Mart UAE with the help of various regional and national marketing managers will use utilize different kinds of promotional tools and tactics.
The company will use a combination of various advertising channels as way of meeting company’s outlined marketing, promotional as well as advertising objective. Wal-Mart UAE will use a combination of advertising channels as a way of reaching the foreign areas of its market segments. Due to the rising costs of advertising, Wal-Mart UAE will employ methods which are cost effective; hence the media mixes which the company will use will comprise of the following strategies.
This will be an online marketing, which aims at the part of the target audience such as professionals, college, university students and young adults. In order to reach the target market, social media networks such as facebook, yahoo, twitter and LinkedIn will be used since people in most of these groups spend a lot of time online.
Wal-Mart UAE will set up special facebook, twitter and LinkedIn webpages that will allow all the Internet users to receive special promotional information related to the company’s products and discount prices. Wal-Mart UAE will use Twitter account to post immediate information about the new products as well as sales to the target audience. Since many of our target consumers use the Internet more frequently, information about our new product will reach them more quickly (John, Sandra & William). In addition, the company will establish its own website known as walmart uae.com in which all the company’s information, product prices, location, accessibility, payment will be posted to the customers.
This will be used by Wal-Mart UAE primarily as a way of achieving company recognition objective. Advertising in print media will be used by Wal-Mart Company primarily to inform the consumers about the new company and its discount prices as well as build interest among them. Wal-Mart UAE will print different newspapers, magazines, and brochures containing information about the company, its stores and warehouses as well as the goods and discount prices. The company will create message templates, which will help the target group develop interest in the new product. Wal-Mart UAE will choose specific places in magazines and newspapers in which it will print on weekly basis the company’s new product offering together with company’s logo and name. This strategy is used to make the consumers more familiar with the product as well as to associate the company’s new product with their own needs.
Television and Radio
Wal-Mart UAE will use the Television and Radio to communicate information about the product and service offerings. Wal-Mart products are priced at low prices hence Wal-Mart UAE will use this slogan “Low prices, always” to win customers. Since the target audience comprises of different groups of individuals, Wal-Mart UAE will work alongside with television and radio networks to determine which television and radio channels suit each of the target market audience. Advertising through the television and radio will help Wal-Mart UAE Company to raise awareness about the new company’s discount prices and product offering among the consumers.
Mobile advertisement involves communicating with consumers through mobile phones (Philip & Armstrong). Wal-Mart UAE will use several mobile marketing communication techniques to reach particular target groups. In the current information era, young teenagers, college and university students today use their mobile phones to carry out most of their educational activities as well as accessing the Internet.
To attract more customers’ Wal-Mart UAE will design its advertisements in a manner that the messages contained in them have a strong appeal to the target consumers. The message that will be posted on these social networks will be precise, clear, concise and informative as well as easy to read. This will ensure that the target group reads the message and understands what Wal-Mart UAE is offering.
Competitive pricing strategy
The company will use competitive pricing strategy through which the products will be priced as low as possible compared to other competitors in the market. Prices of the grocery items at the Wal-Mart stores all over United Arab Emirates will be priced as low as 15% of the local market. On other hand, the electronic items as well as technological market rates for the items will be priced as low as possible enabling each ordinary person to purchase them. (Krishna). The ‘plus one’ policy especially for the manufacturers will be applied for those retailing items at Wal-Mart which will make it mandatory for all the producers to go one way through price reduction and quality increment.
This price policy will have a great impact, especially for small scale producers who may find themselves thrown out of business since it only welcomes large scale producers. Wal-Mart discount and competitive pricing strategy will be helpful in targeting the expatriate’s consumer group who work in UAE and remit money back home. Wal-Mart, therefore, will be a great place to save money for them at the same time not compromising quality. Even though the competitive pricing strategy will be used, the prices will not be set too low in order to avoid creating an impression in the customer’s mind that the product of low quality. The aim of this strategy is to ensure that the customers associate Wal-Mart UAE as shopping mall store offering discount prices to product rather than as low quality provider.
Contribution Margin Pricing Strategy
Contribution margin-based pricing will be another strategy which will be used by company. This is a pricing strategy that maximizes profits derived from an individual product based on the difference between the individual’s product price and variable costs. Using pricing strategy, Wal-Mart UAE will price its products at a price which maximizes the expected company’s profits.
Penetration Pricing Strategy
Penetration pricing is the last pricing strategy that would be used. Penetration pricing is described as a pricing technique in which a company sets its price relatively low compared to the competitors as way of attracting the customers to the products (Joseph & Parker). This kind of strategy usually works on the company’s expectation concept of customers switching to the new company because of the lower prices being offered by the company. Wal-Mart intends to use this pricing strategy to penetrate through the competitive markets of already established companies. This pricing strategy will be used to achieve the marketing objective of increasing market share sales and volumes rather than profits.
Product Positioning and Differentiation
Wal-Mart will seek product and brand advantages primarily as a way of product positioning. Wal-Mart will position its business to consumers as a place to go during economic turmoil. The rationale behind attaching this perception to Wal-Mart’s products and brands is to ensure that the customers associate Wal-Mart with savings and rough economic times. This will help Wal-Mart to improve its performance, especially, during economic downturns. The company will reinforce the First Mover Advantage, which will portray it as an authentic hypermarket and Shopping Mall in UAE and will attract more customers since most of the young consumers in UAE believe that authentic products and brands are of high quality (Joseph & Parker).
Since the company is still new in business it will focus on distribution channels which decrease the costs. Wal-Mart UAE will focus on direct channel method of distribution. Through this method the company will decrease the total distribution cost, hence enabling it to offer lowest prices and at the same time making huge profits from their sales. This method will be the best since it increases the power of buyers.
The distribution center will be operating 24 hours a day using a laser guided conveyer belts as well as cross-docking techniques, which receives goods on side, while on other hand simultaneously filling orders on the other. In addition, the company has implemented a satellite network system, which allows information to be shared within the company’s wide network of stores, distribution centers as well as suppliers. The company has a consolidated system orders for its goods that has enabled the company to buy truckload quantities without incurring the inventory costs. Wal-Mart current management strategy is to build large discount stores as well guarantee everyday low prices to its traditional discount retailers in small rural towns.
Distribution: From Origin to Destination
Port Rashid & Jebel Ali, Khor Fakkan in Dubai and Fujairah in Abu Dhabi will be used given the fact that they are well developed container ports serving as "Hub Ports" for various Shipping Lines serving the Mid East Gulf region. Direct distribution channels will be used to distribute the goods from the origin port as well as destination port.
The products will be distributed through various direct distribution channels including selling agents, forefronts, Internet, retailers, mail order, and store owners primarily to cut down the distribution costs related to middlemen since the company is still new and has no financial stability (Dann & Dann 12-34). The company will employ over hundred selling agents who will directly distribute the products to various consumers including retailers, wholesalers, stores as well as various supermarkets.
Marking and labeling regulations
The company’s products will be labeled with the company’s name Wal-Mart UAE to distinguish it from other products as well as to avoid instances of trademark imitations according to labeling rules and regulations of UAE. The company will work closely with the importers to ensure that the products meet the needs of retailers. Labels for some products will be made in Arabic language for easy reading, especially for those consumers who do not know how to read in other languages except Arabic. Labeling regulations will apply to all the products shipped in bulk as well as in institutional-sized containers according to the UAE label requirements. Bulk cartons of fresh fruits and vegetables will contain label information and carry production/expiration dates.
The cargo containing the goods and products of the company will be placed into large cargo BSL containers, which ia actually a United States Cargo company offering high quality storage, shipping, self storage, and specialty containers over the world. Once the goods are at the port of destination they will be transported using trains, trucks, and Lorries to various destination stores, supermarkets, shopping malls, and company’s store centers. Air freight containers will be used for handling delicate and perishable goods and these products will packed in a set of standard aluminum container sizes of up to 11.52 m3 (407 cu ft) in volume. Since shipping costs are expensive, especially when transporting fragile goods, the company intends to spend approximately $500,000 on the containerization for the first month of the company’s establishment.
Packaging is an important concept in product marketing since it plays a significant role in product marketing mix. Packaging, therefore, protects the product during transportation, while it sits in the shelf and during the use by a consumer (Cheverton). Packaging is an important element for product promotion since it distinguishes itself from the competitors. In addition, it allows the business to design its promotional schemes, which can earn the company extra revenues through the advertisements. In relation to this, Wal-Mart UAE will package its products neatly in relation to the Islamic culture hence the writings on the products will be written in English as well as in Arabic. These endorsements and labels are meant to increase the volumes of product sales and revenues (Cheverton).